Laurentian's use of the Companies Creditors Arrangement Act admist bankruptcy has sparked conversation about the legality of this resource from community members, the CUAT and federal government

In February 2021 the leadership of Laurentian University made the decision to file for creditor protection from the Companies Creditors Arrangement Act amidst bankruptcy. The CCAA allows large corporations facing insolvency to receive guidance, including plans to restructure their corporation. As a federal law, the Government of Canada introduced this act to help companies proceed with their work as they manage their internal finances. The university has since exited insolvency and terminated their protection under the CCAA as of Nov. 2022.

A review done in 2022 by then Ontario Auditor General Bonnie Lysyk found that since the incitement of the CCAA, 195 university staff and faculty lost their jobs.

With the protection of the CCAA, they were not required to honour agreements previously made with labour groups, such as senior staff firing and severance. Additionally, 76 academic programs were cut, impacting roughly 932 students.

CTV news coverage shared their firing had been done through zoom, where Laurentian University’s Vice President of Academics promptly exited the call after sharing the news.

To protect the release of this information reaching the public for review, Laurentian university has spent $30 million in advisors and lawyers.

A statement and commissioned report by the Canadian Association of Universities Teachers shared that they believe that the decision made by Laurentian can become a precedent for others if access to CCAA is not legally halted. The CAUT stated that it is important to prevent public universities to file for bankruptcy in the same manner as commercial businesses.

Following these demands for prevention of public universities to utilize resources like CCAA, the Canadian federal government released statements. In Nov. 2023, they shared that they will be taking active steps to change CCAA so that public universities can no longer utilize this tool amid financial hardship. The exact steps taken are yet to be released and are awaited by many in 2024.

In a leaked framework proposal, the province expressed an urgent need for universities and colleges to further specialize in niche areas. The Ontario government sent the draft to administrators, seeking clarification on strategic enrolment plans and feedback on metrics tied to funding.

The leaked document, entitled “Ontario’s Proposed Differentiation Policy Framework: Draft Discussion Paper” and marked confidential, comes on the heels of expected changes to the post-secondary sector by the Ministry of Training, Colleges and Universities.

The document stresses the need “to protect the gains of the last 10 years” in the face of current fiscal challenges.

The Ministry stated that it “has opted for differentiation as a primary policy driver for the system” and outlined eight components under which institutions can be evaluated. The components range from teaching and learning to innovation and economic development.

The government also proposed evaluation metrics to be used in funding considerations, based on discussions with various stakeholders since 2012. Some metrics include teaching-only faculty, student employment outcomes, employer satisfaction, research productivity and distribution of credentials.

Already, the proposed framework is raising questions about institutional autonomy and student impact, particularly for those living in northern and rural areas.

On Sept. 24, OPSEU, a union which represents more than 8,000 college faculty, requested that joint task forces be set up “to both mitigate the negative impact of any changes on faculty, but also to achieve the changes to the objectives.”

Since roundtable discussions began last year, CFS-Ontario and OCUFA have expressed concerns about differentiation being a cost-saving measure. OUSA has cautioned that teaching and research should not be separated in the differentiation process.

In response to recent concerns, TCU minister Brad Duguid said, “We [the province] will not be micromanaging but we do have a stewardship role.” He said the province would “use funding mechanisms to drive change in the system.”

“If there’s a world-class institution doing something in one area and another institution down the road wants to get in on it, that doesn’t really make sense,” he said.

Duguid also emphasized the importance of “building a culture of innovation and entrepreneurialism.”

“Some of our institutions are doing a tremendous job [of doing that]. We need to encourage that because it’s going to benefit graduates in any field.”

For McMaster University, a large-sized school with approximately 24,000 full-time students, one challenge will be to reconcile high research intensity with a student-centred approach - two facets that have been identified as equally important in the University’s 2011 “Forward With Integrity” mandate. With greater differentiation, it remains to be seen how the university will effectively balance the two priorities.

McMaster’s provost, David Wilkinson, said the proposed framework is not surprising but it is unclear how the province will move forward in terms of funding.

“It’s too early to tell what the impacts [of the framework] might be,” Wilkinson said. “It’s certainly a competitive process and it does force us to demonstrate to the ministry how we can be more effective than other universities. It will also provide certain avenues for collaboration.”

Like other Ontario universities, McMaster is already differentiated to an extent—for example, the University is well known for its school of medicine and flagship interdisciplinary programs.

Laurentian University, a smaller institution in Sudbury with a total of 9,700 students, has also been setting itself apart from other institutions. Laurentian released its strategic plan in 2012, outlining the University’s distinctive programs, including mining engineering, sports psychology and applied geophysics.

Laurentian president Dominic Giroux said the university has looked to expand programs that aren’t readily available elsewhere.

“When I first came in [Apr. 2009], the strategic plan was 16 pages and had 102 priorities – I wanted the board of governors to submit to us a report of no more than five pages to identify a limited number of signature programs in research excellence. It took us about 10 months. What came out loud and clear at the initial stage was the need to focus, focus, focus,” Giroux said.

“Differentiation shouldn’t lead to program expansions or closures - it’s an issue of where more space should be allocated,” Giroux said.

By Oct. 11, administrators are expected to respond to the government’s proposed framework. The government stated it would provide a finalized framework by late October.

While various groups have been consulted since 2012, the government will negotiate only with institutions about metrics and funding. Universities’ strategic mandate agreements will be under negotiation until spring 2014.